Consumer electronics business is now top grosser for Reliance Retail

The consumer electronics business of Mukesh Ambani-led Reliance Retail has for the first time overtaken the company’s grocery business to become the top revenue grosser in the financial year 2017, riding on the sales of Lyf devices and new store launches.

The company’s annual report of the last five years assessed by ET showed that grocery or value formats, as it was called earlier, was the major revenue churner for Reliance Retail till financial year 2016. However, in financial year 2017, the consumer electronics business — that runs Reliance Digital chain — accounted for 34% of the total turnover of the company, followed by the grocery segment with 32% share, according to fourth quarter result of FY17 released by the company.

The other two segments, petroleum retail and fashion and lifestyle, accounted for 19% and 15%, respectively.

Prior to that, the consumer electronics business had a share of 29% in financial year 2016, whereas the share of grocery was 41%, when it was leading the retail segment.

The share of fashion and lifestyle went down 5% in 2017, according to the company’s financial report.

In financial year 2013, the company saw as much as 56% revenue coming from value formats, while digital accounted for mere 20%. In financial year 2014, value formats contributed 55% to the overall revenue whereas digital had a share of 21%.

Although value formats stood at 55% in financial year 2015, the share of digital gradually rose to 24%. At the end of financial year 2016, Reliance had about 1,700 stores operating under the digital retail concept.

The company added about 300 new Reliance Digital, Xpress Mini and Jio stores in financial year 2017 to reach 1,996 stores by the end of March 31.

“We have been able to grow at a good pace both in our like to like store sales and also with our new stores. Over the last couple of years we have been growing our Reliance Digital stores and we will continue to do so,” Brian Bade, chief executive of Reliance Retail told ET in an interview last week.

Bade said the company plans to open around 100 more Reliance Digital stores in the next couple of years and is eyeing a market share of 12% in the Indian market during this period.

The company said it sold around 3 million Lyf handsets during the second quarter (July-September) of financial year 2017, followed by sale of nearly 2.8 million Lyf devices and accessories in the third quarter (October-December) and more than 2.6 million Lyf and JioFi devices in the fourth quarter (January-March), driven by the launch of the group’s telecom venture Reliance Jio Infocomm.

The company launched 20 Lyf models ranging from Rs 3,000 and Rs 20,000 in the first quarter of financial year 2017.